Union, N.J. – Beleaguered Bed Bath & Beyond may skip debt payments coming due Feb. 1 as it prepares for a bankruptcy filing, sources told the Reuters news agency.
Yesterday, Bed Bath & Beyond expressed “substantial doubt” about its ability to continue operations. When it releases its Q3 results on Jan. 10, the company expects to report a net loss of $385.5 million. Sales tumbled approximately 33% for the quarter ended Nov. 26 due to anemic in-stocks and traffic, it noted in an SEC filing on Jan. 5.
Sue Gove, president & CEO, said yesterday that the company initiated a turnaround at in early September at the start of the third quarter. A major component of the strategy involves creating a more nimble infrastructure that aligns with customer demand and preferences.
Getting vendors to pony up enough inventory to satisfy that weaken level of demand has been a stumbling block, she acknowledged. Although BBB crafted more productive merchandise plans and improved its execution, reduced credit limits resulted in sparse in-stocks on sought-after goods during Q3, she said.
In a bid to strengthen its balance sheet, Bed Bath since October has been asking bondholders to exchange their holdings for new debt. The extended deadline lapsed on Jan. 4, and the company notified that SEC that it was closing the offer because consent solicitation conditions had not been satisfied.